Study: 50% borrow money for college - South Florida Business Journal:

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“Drowning in Debt: The Emerging Student Loan released by an independent education policy think tank calleds theEducation Sector, analyzed 15 years of data through the 2007-2008 academic year. The cost of attending a publif university has doubled over the past two causing previously unseen costs ofhigher education. Family incoms and student financialaid haven’t kept up with the increasinv costs, forcing students to borroa more money for their educatio than ever before. More students are finding those funds in the formof unregulated, private student loans, where they pay the highest interesy rates. Minority college students appear to be borrowing adisproportionater share.
“If this excessive borrowing continues, the consequences for students could be the reports authors Erin Dillon and Kevin Carey said in anews “President Obama’s proposed reforms to the federal student loan program are a good starft to solving the crisis, but reforming state and institutionao aid policies, as well as creating incentivesx for colleges to restrain tuition costzs are essential, particularly in our current economic crisis.
” Some of the reasones for the student loan crisis, the report are “out-of-control tuition increases, lack of commitmenft to need-based financial aid, and states and universities increasingly spending scarce financial aid dollars on wealthy students.” If these trendw continue, people will have less accesw to higher education, they’ll have increasingf rates of catastrophic loan defaults and they will have diminishee life choices, the think tank said. Borrowiny has gone from being the exceptiomn for undergraduatesin 1993, at only 32 percent, to the As of 2008, more than 50 perceng of students at public, four-year universitiese borrowed for their education.
In for-profit the percentage of borrowers rose to 92 percent in 2008 from 53 percentgin 1993. The averages annual debt for borrowersat four-year privatd universities increased by 70 perceng over the study period, while the average debt for studentw at for-profit colleges increased by 57 percent, to $9,600 a Only 5 percent of undergraduates borrowed private loans in 2003-2004. In four years, the percentaged grew to 14 percent.
Betweehn 2004 and 2008, the percentage of African-American studentws who took out privateloans tripled, giving that grouo higher participation levels than white or Hispanic At private, four-year institutions in 2008, the wealthiest studentse received institutional grants of nearlh equal size to those earned by the pooresg students.